They’re useful for attestation, boot measurement, and maybe passkeys, but I wouldn't trust them to securely handle FDE keys for several reasons. Not only do you have to trust the TPM manufacturer – and there are many – but they also have a bad track record (look up Chris Tarnovsky’s presentation about breaking TPM 1.x chips). While parameter encryption has been phased out or not used in the first place, what's even worse is that cryptsetup stores the key in plaintext within the TPM, and this vulnerability remains unaddressed to this day.
https://arxiv.org/abs/2304.14717
Root-of-trust measurement (RTM) isn't foolproof either.
https://www.usenix.org/system/files/conference/usenixsecurit...
My pet peeve is that the entire TPM design assumes that, at any given time, all running software has exactly one privilege level.
It’s not hard to protect an FDE key in a way that one must compromise both the TPM and the OS to recover it [0]. What is very awkward is protecting it such that a random user in the system who recovers the sealed secret (via a side channel or simply booting into a different OS and reading it) cannot ask the TPM to decrypt it. Or protecting one user’s TPM-wrapped SSH key from another user.
I have some kludgey ideas for how to do this, and maybe I’ll write them up some day.
[0] Seal a random secret to the TPM and wrap the actual key, in software, with the sealed secret. Compromising the TPM gets the wrapping key but not the wrapped key.